ZARNOCH, J.
In this case, the employer/appellant, Washington Metropolitan Area Transit Authority ("WMATA"), appeals a judgment from the Circuit Court for Prince George's County in favor of the employee/claimant, appellee, Robert Washington ("Washington") stemming from a jury finding that he sustained a 64 percent disability and industrial loss of use as a result of an accident arising out of and in the course of his employment. Clouding that award, WMATA says, are evidentiary problems regarding Washington's post-injury termination and his earnings from his private business. For the following reasons, we agree, in part, with WMATA and reverse and remand for further proceedings.
On August 24, 2005, while working as a train operator with WMATA, Washington sustained an accidental injury when he slipped and fell at the train station, injuring the right side of his lower back. At the time of the injury, Washington was also operating Tilly's Limousine Incorporated ("Tilly's"), a stretch limousine company he formed in 2004.
Immediately after hurting his back, Washington was taken to the emergency room at Fort Washington Hospital, where he received medical treatment and was prescribed physical therapy, which he engaged in for approximately two months. He filed a workers' compensation claim, and he was off work until November 17, 2005, when he returned to WMATA as a train operator.
On that day, Washington filed another injury report due to a malfunctioning seat, which, he asserted, caused pain to his lower back. He joined this incident with his August 2005 injury, and filed a consolidated claim.
In early and mid-2006, the Workers' Compensation Commission (the "Commission") held several hearings to address Washington's consolidated claim, resulting in a "directive to pay or in an affirmation of the parties' agreement to pay temporary-total-disability benefits." Then, Washington began working on a light duty basis as a parking lot inspector, which required him to constantly drive a car, look for suspicious activity in parking lots, and report back to WMATA.
In June 2007, Washington stopped receiving temporary-total-disability payments. Washington protested this discontinuance and filed a claim to restore payments, which the Commission heard on August 13, 2007. When questioned about his ability to work, Washington testified without equivocation that he did not work two days prior to the hearing. WMATA then played footage from videotape surveillance that showed Washington working as a limousine driver for Tilly's during the time he had denied working. Upon receiving this evidence and ascertaining from Washington that he owned the limousine service business, the Commission ruled against Washington.
Shortly thereafter, a WMATA superintendent interviewed Washington and discharged him on August 22, 2007 on the grounds of "false representations [made] in order to obtain [workers' compensation] benefits...." Subsequent to his termination, Washington stopped receiving work hardening and other medical treatment. Washington then pursued the grievance process under the collective bargaining agreement with his union. The grievance was resolved in favor of WMATA on February 9, 2009.
On October 28, 2009, the Commission held a hearing in connection with Washington's claim for permanent partial disability. After reviewing the evidence and the findings of the parties' expert witnesses, the Commission concluded on November 6, 2011 that Washington suffered a permanent partial disability "amounting to 22% industrial loss of use of the body as the result of an injury to the back...." Dissatisfied with this award, Washington subsequently filed a petition for judicial review in the Circuit Court for Prince George's County. WMATA did not challenge the award.
Prior to trial, WMATA moved unsuccessfully to exclude all evidence Washington planned to present concerning his past and current income as the owner of Tilly's and his past or present loss of income resulting from his termination of employment with WMATA. WMATA argued that evidence of Washington's wage differential was irrelevant, because the wage loss did not occur as a result of the accidental injury, but instead was caused by Washington's fraudulent statements to the Commission. In addition, the employer contended that even if the evidence of wage loss was relevant, "it is very misleading," because "the jury may decide to punish WMATA for terminating him or to give him a permanent rating that is the equivalent
A jury trial began on March 22, 2011. During opening statements, Washington's counsel asked the jury to award Washington a 75 percent industrial loss of use rating based on the following wage depression:
Counsel continued:
Both parties presented videotaped depositions of two medical experts, which were conflicting. Washington's expert, Dr. Michael Franchetti, opined that Washington had reached maximum medical improvement and had suffered a 28 percent "whole person impairment." According to Franchetti, Washington's work injury prevented him from participating "in any activities that involve bending or twisting of his back, and that he should not sit or drive more than 35 minutes without a change of position." Dr. Philip Schneider, WMATA's expert, concluded that Washington was impaired at the level of 15 percent of his body as a whole, but that there was nothing "in particular" that would have limited Washington from returning to work as a train operator.
Washington testified that his back felt like his body was deteriorating, and he could not walk, exercise, or bowl as frequently as he could before the injuries, and that he constantly felt like there was a "fist pressing up against" his back. Washington stated that, since losing his job at WMATA, he had not "done a lot of looking" for another job, but instead worked for Tilly's, where he hired others to drive, "occasionally" drove, and performed clerical
During cross-examination, counsel elicited the following testimony concerning Tilly's limousine business: in 2007 and 2008, Washington purchased some limousines with funds from a loan from his relatives, that he had recently received another loan for $10,000.00, and that he paid back the loans in monthly installments of $1540.00. He also confirmed that he wrote off $212,245.00 on his 2008 income tax returns because of limousine purchases.
During closing arguments, Washington's counsel focused on Washington's wage loss from his termination from WMATA, arguing over objection that "[w]age loss is the strongest evidence of disability ... [t]hat's why [Washington's] employment with Tilly's is so important." According to his counsel, in the six years since his termination from WMATA, Washington was now earning 25 percent of what he was earning as a train operator. He urged the jury to award Washington 75 percent permanent partial disability, representing the difference between Washington's WMATA wages and his earnings from Tilly's:
In WMATA's closing argument, its counsel noted:
WMATA presents three questions for review:
1. Whether the trial court erred in permitting Claimant to introduce evidence of his pre-injury wages at WMATA and speculative evidence regarding earnings from his startup limousine business to prove industrial loss of use where WMATA terminated Claimant as a result of his misrepresentations before the Maryland Workers' Compensation Commission?
2. Whether, in the absence of properly admitted evidence regarding Claimant's wages from WMATA or earnings from his start-up limousine business, Claimant presented sufficient evidence to support the jury's award of 64 percent industrial loss of use in light of the Commissioner's award of 22 percent?
3. Whether the trial court erred in denying WMATA's objection, and sustaining the verdict, where Claimant had the burden of proof and failed to present vocational expert testimony or other sufficient evidence to establish loss of earning capacity in light of his termination for cause from WMATA?[
Focusing in part on question one, we reverse the circuit court decision and remand the case for a new trial. In light of this disposition, we need not address the other issues presented by WMATA.
The touchstone of the workers' compensation system is an industrial injury which results in an occupational disability or death. Queen v. Agger, 287 Md. 342, 343, 412 A.2d 733 (1980). A permanent partial disability is one that is "permanent in duration and partial in extent." Wal Mart Stores, Inc. v. Holmes, 416 Md. 346, 354 n. 2 (2010). Unlike payments for temporary disability, compensation awards for permanent disability are "not based solely on loss of wages, but [are] based on actual
As Professor Larson has observed, the "disability concept is a blend of two ingredients[:] ... disability in the medical or physical sense ... [and] the de facto inability to earn wages." 4 Larson's Workers' Compensation Law (MB) § 80.02 (2007). Thus, the test used to determine the degree of disability is whether a claimant's injuries allow him to return to and adequately perform his prior job with the employer, and whether the workplace injury caused a reduction of wages. Getson v. WM Bancorp, 346 Md. 48, 62, 694 A.2d 961 (1997) (For compensability, "[t]he Commission must do more than merely adopt medical evaluations of anatomical impairment; the Commission must assess the extent of the loss of use by considering how the injury has affected the employee's ability to do his or her job").
In Maryland, permanent disability payments for unscheduled "Other Cases" are calculated by an evaluation of the factors set forth in Md.Code (1999, 2008 Repl. Vol.), Labor and Employment Article ("Lab. & Empl.") § 9-627(k)(1)-(2):
(Emphasis added).
Md. Rule 5-402, governing the admissibility of relevant or irrelevant evidence, provides: "Except as otherwise provided by constitutions, statutes, or these rules, or by decisional law not inconsistent with these rules, all relevant evidence is admissible. Evidence that is not relevant is not admissible." Thus, although a trial court has "wide discretion" in weighing the relevance of evidence, it does not have discretion to admit irrelevant evidence. Id.; State v. Simms, 420 Md. 705, 724, 25 A.3d 144 (2011).
In evaluating the correctness of the trial court's ruling, we engage in a two-pronged analysis. First, we consider whether the evidence is legally relevant, a conclusion of law which we review de novo. Simms, 420 Md. at 725, 25 A.3d 144. Evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Md. Rule 5-401. If we conclude that the challenged evidence meets this definition, we then determine whether the court nonetheless abused its discretion by admitting relevant evidence which should have been excluded because its "probative value is outweighed by the danger of unfair prejudice, or other countervailing concerns as outlined in Maryland Rule 5-403." Simms, 420 Md. at 725, 25 A.3d 144.
WMATA asserts that the trial court erred in denying its motion in limine and
Before addressing these contentions, we note that the propositions jumbled in WMATA's first assignment of error, to a large degree, touch on questions litigated in other jurisdictions (although in a more direct and more orthodox fashion). However, these issues have not been finally resolved in Maryland. We find though that separating out the components of the questions and their premises makes our task easier.
As a basis for excluding evidence of Washington's pre-injury WMATA income, the employer cites in its brief a number of out-of-state decisions for the proposition that an employee fired for misconduct has voluntarily removed himself from the workforce and is not entitled to wage loss benefits.
In Arizona Dep't of Pub. Safety v. Industrial Comm'n, 176 Ariz. 318, 861 P.2d 603 (1993), the Arizona Supreme Court said:
Id. at 608.
The appellate court went on to note:
Id. (Emphasis added). (Citations omitted). The Minnesota Supreme Court has similarly observed:
Marsolek v. George A. Hormel Co., 438 N.W.2d 922, 924 (Minn.1989). (Emphasis added). See also PDM Molding, Inc. v. Stanberg, 898 P.2d 542, 547 n. 4 (Colo. 1995) ("[T]erminating an employee for fault does not automatically bar an award of temporary total disability benefits...."), superseded by statute, Colo.Rev. Stat. § 8-42-105 (2012); Johnson Controls, Inc. v. Fields, 758 A.2d 506, 509 (Del.2000) ("To permit the employer to claim a forfeiture of compensation through its disciplinary process works a deprivation of benefits already fixed at the time of injury."); Stewart v. CRS Rinker Materials Corp., 855 So.2d 1173, 1178, (Fla.Dist. Ct.App.2003) (Once it has been determined that the "claimant had been terminated, the question then [becomes] whether claimant [has] satisfied his burden of showing a causal connection between his injury and loss of earning capacity after his termination.").
In our view, Maryland cases point in this direction. In Victor v. Proctor & Gamble Mfg. Co., 318 Md. 624, 569 A.2d 697 (1990), the Court of Appeals rejected an employer's contention that an employee's voluntary retirement impeded his earning capacity, not his accidental injury.
It is no great leap to conclude from these cases that an employee's termination would not automatically bar benefits if the claimant's evidence demonstrated that his or her disability caused the subsequent inability to find work. See pp. 453-54, 63 A.3d at 617-18, supra. WMATA emphasizes the fact that Washington was terminated for lying in order to obtain benefits. While such misconduct is not to be condoned, it is noteworthy that the General Assembly has barred compensation only for an employee who is convicted of knowingly
Finally, it is hard to see how WMATA was prejudiced by the denial of this component of its motion in limine. The employer apparently requested and obtained a special verdict on the issue of whether the percentage of disability and incidental loss was the result of the loss of Washington's job with WMATA — a question the jury answered in the negative.
For all of these reasons, we conclude that the circuit court did not err in declining to exclude evidence of Washington's pre-injury earnings with WMATA solely because he had been terminated from his position.
We now turn to WMATA's unsuccessful attempt to exclude evidence of Washington's past and current income as the owner of Tilly's. Here, WMATA is on more solid ground.
According to relevant authorities, the general rule is that profits derived from a business are not to be considered as earnings and cannot be accepted as a measure of loss of earning power unless they are almost entirely the direct result of the claimant's personal management and endeavors.
For these reasons, it is our view that the circuit court erred in not granting WMATA's motion in limine and in allowing testimony regarding Washington's business income.
JUDGMENT AFFIRMED IN PART AND REVERSED IN PART. CASE REMANDED FOR FURTHER PROCEEDINGS NOT INCONSISTENT WITH THIS OPINION. COSTS TO BE EVENLY DIVIDED BETWEEN THE PARTIES.